World markets leap on China trade data

[beijingwalker]

World markets leap on China trade data
ABC Online - 4 hours ago
Updated January 11, 2012 10:46:20

Global share markets have rallied on hopes of more Chinese economic stimulus and an optimistic forecast for 2012 from global aluminium giant Alcoa.

Stocks in the United States rose to their highest level since July last year overnight, as materials shares gained on hopes of higher demand for metals.

The S&P 500 increased 0.9 per cent to 1,292 and the Dow Jones Industrial Average rose o.6 per cent to 12,462.

Trade data showed that China's imports slowed in December, increasing its trade surplus to $16.5 billion.

Exports rose 13.4 per cent for the year, while imports rose by 11.8 per cent, the slowest growth in 10 months.

For 2011, China's trade surplus came in at $155 billion, lower than in 2010.

The slowdown in imports raised hopes that Beijing could do more to boost its economy such as cutting interest rates, which would increase global growth.

The figures also showed that Chinese copper imports rose 12.6 per cent from November to December to a record high.

Alcoa rallied more than four per cent in early trade after its revenue came in better than expected in the fourth quarter, even though it made a nearly $200 million loss because of falling aluminium prices.

Alcoa shares finished 2 cent higher at $US9.44.

The company said it expected global demand for aluminium to rise 7 per cent in 2012, although European demand would be weaker but some analysts were sceptical about the forecasts.

Jewellery retailer Tiffany fell 11 per cent to $US59.94 after cutting its annual earnings forecast.

But shares in Kodak surged 50 per cent to 60 US cents after it restructured its business into commercial and consumer divisions.

European markets also gained on the optimism about China and Alcoa's bullish outlook.

In London, the FTSE 100 rose 1.5 per cent to 5,697, in Germany the DAX put on 2.4 per cent and the CAC 40 in France rose 2.7 per cent to 3,211.

Investors in France appeared relieved after Fitch ratings agency said it would not cut the country's prized AAA credit rating this year unless France suffered major economic shocks.

Elsewhere in Europe, Fitch says Italy could see its rating cut this month and it thinks Greece could leave the eurozone in 2012.

Data from the Bank of France showed that the economy was flat in the last three months of last year.

Commodities rose on the share market optimism.

At 9am (AEDT) spot gold was worth $US1632.63 an ounce.

Tapis crude oil closed at $US122.51 a barrel in Singapore overnight and West Texas Crude was at $US102.19 barrel, partly pushed up by tensions in the Middle East and Nigeria.

The Australian dollar was strong and pushing new highs against the euro, buying 103.2 US cents, 79.3 Japanese yen, 80.8 euro cents, 66.6 British pence and $NZ1.30.